Press Releases, 21/11/2013

Finland to recover development cooperation funds from Tanzania

Press Release 245/2013
21 November 2013

Finland is recovering 80,000 euros of development cooperation funds from Tanzania. The reason for the recovery is the irregularities detected in the financial management of the programme for supporting Tanzania’s local government reform.

According to the special audit commissioned by six donor countries, 280,000 euros of the funds intended for the reform of Tanzania’s local government have been used for unacceptable purposes. The countries financing the programme have decided to recover the funds and have officially notified the Tanzanian government of this. Finland’s share of the support to be recovered is about 80,000 euros, which corresponds to Finland’s share of financing for the support programme.

The irregularities in financial management were originally discovered during the routine monitoring of finances. Payments to the support programme have been suspended, and the whole programme will be terminated once the last investigations are completed in 2014.

The reform of Tanzania’s local government aims at the decentralization of administration and the improvement of basic services provided by municipalities.

“We don’t approve of the misuse of funds; therefore, the issue is investigated thoroughly. However, the people who suffer the most are ordinary Tanzanians who need the basic services provided by municipalities,” says Helena Airaksinen, Head of the Unit for Eastern and Western Africa at the Ministry for Foreign Affairs.

“The case is very regrettable, but also shows that the monitoring works. It is also positive that the Tanzanian authorities really want to cooperate in resolving problems and correcting the shortcomings in financial management,” Airaksinen continues.

For the special audit the auditors have gone through the accounts of the programme for the years 2009 to 2012. The unacceptable expenses discovered in the audit mean, for instance, cars purchased at exorbitant prices and excessive and unduly paid per diem allowances and fees.

The donors will commission one more special audit that concentrates on the support programme’s last year of operations in 2012–2013, and will once again go through the large purchases made during the operating year of 2011–2012. The audit will also reinforce the activities of the local audit office so that misuses can be prevented more effectively in the future.

During 2009–2011, Finland, Sweden, the Netherlands, Ireland, Japan and Germany allocated a total of 16 million euros in support for the local government reform.